What Happened in The Chamber of Deputies?

On December 5, the lower house of Paraguay’s bicameral legislature held a tense session where they debated a bill aimed at promoting crypto mining by utilizing the country’s surplus electricity. Unfortunately for crypto enthusiasts, the session concluded without the desired outcome after a veto from President Mario Abdo Benítez.

Arguments For and Against

During the discussions, lawmakers debated the potential advantages of inviting crypto miners into their midst versus the financial implications of such a move. Deputy Carlos Sebastian Garcia spoke passionately in favor, highlighting that crypto mining could spur job creation, investment, and generate local taxes, ultimately boosting the economy. “Crypto mining would generate a source of employment, investment in capital, municipal taxes, [value-added tax], and a lot for local economies,” he stated, advocating for re-evaluation of the veto.

On the flip side, Deputy José Reynaldo Rodríguez raised eyebrows with his claims about the financial burden this move could usher in. “The rate with which the energy would be awarded to this industry is 15% above the industrial rate,” Rodríguez warned, suggesting that it could lead to a staggering loss of $30 million annually for the state’s coffers.

The Vote Breakdown

Despite the heated arguments, only 38 out of 80 lawmakers voted to reconsider the so-called “Regulating the industry and marketing of virtual assets — crypto assets” bill. Nine legislators opposed it, while the remainder waffled between abstaining and voting blank—basically the legislative equivalent of hiding under the desk during a pop quiz.

The Legislative Journey So Far

Originally given a thumbs-up by the Senate in July, the bill seemed poised for success. It sought to recognize crypto mining as an official industrial activity in a country gaining notoriety for its low electricity rates. Moreover, it included proposals for imposing a modest 15% tax on crypto endeavors. However, President Benítez’s veto in August threw a wrench in the works, prompting this month’s revisit.

Paraguay’s Position in the Crypto Context

With low energy costs, Paraguay has become a hotspot for both local and foreign entities looking to establish mining operations. The neighboring country of Uruguay appears to be moving ahead with its own digital asset regulations, introducing a recent bill that appoints its central bank as the chief authority on virtual currencies. One can’t help but laugh—while Paraguay’s lawmakers are caught in a legislative limbo, their neighbors are sprinting ahead. Talk about a case of cryptocurrency FOMO!